What are the implications of the frequent regulatory actions taken by the US SEC and OCC?

Deng Tong, Jinse Finance

On December 11, 2025, the Depository Trust Company (DTC) received a no-objection letter from the U.S. Securities and Exchange Commission (SEC), allowing it to tokenize a portion of its custodial assets. DTC aims to leverage blockchain technology to connect traditional finance (TradFi) and decentralized finance (DeFi), thereby building a more resilient, inclusive, and efficient global financial system. Previously, the Office of the Comptroller of the Currency (OCC) issued Explanatory Letter 1188, confirming that national banks can engage in permitted banking activities related to risk-free principal crypto asset transactions.

This article focuses on recent regulatory actions by the U.S. SEC and OCC.

I. SEC: DTCC Can Tokenize Stocks, Bonds, and Treasury Bonds

Yesterday, the Depository Trust & Clearing Corporation (DTCC) announced that its subsidiary, Depository Trust Company (DTC), has received a No-Action Letter (NAL) from the U.S. Securities and Exchange Commission (SEC), authorizing it to offer a new service in a controlled production environment, within the framework of federal securities laws and regulations, for the tokenization of real-world assets held in custody by DTC. DTC expects to begin launching the service in the second half of 2026.

The No-Action Letter authorizes DTC to provide tokenization services to DTC participants and their clients for a period of three years on a pre-approved blockchain. According to the No-Action Letter, DTC will be able to tokenize real-world assets, with the digital versions enjoying the same rights, investor protections, and ownership as traditional assets. Furthermore, DTC will provide the same high level of resilience, security, and robustness as traditional markets.

This authorization applies to a range of specific highly liquid assets, including the Russell 1000 Index (representing the 1000 largest U.S. listed companies by market capitalization), ETFs tracking major indices, and U.S. Treasury bills, bonds, and notes. This no-action letter is significant because it allows DTC to launch the service faster than usual once it is finalized, subject to specific restrictions and statements. The SEC's no-objection letter is a key driver of the company's broader strategy to advance a secure, transparent, and interoperable digital asset ecosystem and fully realize the potential of blockchain technology. DTCC President and CEO Frank Lassara stated, “I want to thank the U.S. Securities and Exchange Commission (SEC) for their trust in us. Tokenization of the U.S. securities markets promises many transformative benefits, such as collateral liquidity, new trading models, 24/7 access, and programmable assets, but this can only be realized if the market infrastructure is firmly laid to meet this new digital age. We are very excited to take this opportunity to further empower the industry, our participants, and their clients, and drive innovation. We look forward to collaborating with all parties in the industry to securely and reliably tokenize real-world assets, thereby driving the future of finance for future generations.” To support this strategy, DTCC’s tokenization solution will enable DTC participants and their clients to utilize comprehensive tokenization services powered by the DTCC ComposerX platform suite. This will allow DTC to create a unified liquidity pool across the traditional finance (TradFi) and decentralized finance (DeFi) ecosystems, building a more resilient, inclusive, cost-effective, and efficient financial system. According to the no-action letter, DTC is authorized to offer limited production-level tokenization services on L1 and L2 providers. DTCC will provide more details on listing requirements (including wallet registration) and the L1 and L2 network approval process in the coming months. SEC Chairman Atkins stated: "On-chain markets will bring greater predictability, transparency, and efficiency to investors. DTC participants can now directly transfer tokenized securities to other participants' registered wallets, and these transactions will be tracked by DTC's official records. This move by DTC marks a significant step towards on-chain capital markets. I am pleased to see the benefits this initiative brings to our financial markets and will continue to encourage market participants to innovate to drive us toward on-chain settlement. But this is just the beginning. I look forward to the SEC considering granting innovation exemptions, allowing innovators to leverage new technologies and business models to begin transitioning our markets on-chain without being constrained by cumbersome regulatory requirements."

II. OCC: Crypto Companies Seeking Banking Licenses Should Be Treated Equally Like Other Financial Institutions

On December 8th, Jonathan Gould, Comptroller of the Currency (OCC), stated that cryptocurrency companies seeking U.S. federal banking licenses should be treated equally to other financial institutions.

So far this year, the OCC has received 14 applications to establish new banks, "including some applications from entities engaged in new or digital asset activities," which is almost on par with the number of similar applications received by the OCC in the past four years.

“The charter system helps ensure that the banking system keeps pace with financial development and supports modern economic growth. Therefore, institutions engaged in digital assets and other emerging technology-related businesses should have the opportunity to become federally regulated banks.” The regulator “receives letters from existing national banks almost daily about their exciting initiatives in innovative products and services. All of this strengthens my confidence in the OCC’s ability to effectively regulate new entrants and new business from existing banks in a fair and impartial manner.” [Image caption: Jonathan Gould, Comptroller of the Currency, speaking at the Blockchain Association Policy Summit 2025.] Source: YouTube

III. What are the implications of the policy directions of the SEC and OCC?

With the DTC's approval to tokenize core assets such as stocks, bonds, and ETFs on-chain, real-world assets are being formally incorporated into the US federal securities system. This means that core asset classes in traditional financial markets will have a "native version" on the blockchain and enjoy all the legal rights of traditional assets. The OCC has explicitly stated that institutions engaged in digital asset business can apply for federal banking licenses on an equal footing with traditional institutions, meaning that the crypto industry has, for the first time, a formal path to enter the "compliant core layer" of the US banking system. The regulatory directions of the SEC and OCC are actually the US competing for global standards in digital finance. As blockchain technology becomes financial infrastructure, the US is adopting a model similar to that of the internet era: leading the setting of global rules through institutional and regulatory frameworks.

Appendix 1: Main points of Gould's speech:

Among the applications submitted to the OCC, several are about banks establishing new National Trust Banks or wishing to convert to National Trust Banks.

This growth demonstrates healthy market competition, reflects a commitment to innovation, and should be encouraging for all. The number of applications has returned to the OCC's normal levels, consistent with past experience and practices. The OCC has been responsible for issuing charters to National Trust Banks since the 1970s, a power explicitly granted to the Board of Bank Supervision (ABC) by Congress in 1978. Currently, the OCC regulates approximately 60 National Trust Banks. Some banks and their industry associations have expressed concern about some pending applications. They point out that approving these applications would violate OCC precedent, as it would allow National Trust Banks to engage in non-trusteeship activities. What they fail to acknowledge is that the OCC has allowed National Trust Banks to engage in non-trusteeship activities for decades. In fact, prohibiting National Trust Banks from engaging in non-trusteeship activities would not only threaten the dynamics of the federal banking system but also disrupt the trillions of dollars of traditional business already held by National Trust Banks. Under relevant regulations, National Trust Banks must limit their business activities to the operations and related activities of a trust company. Despite recent opposing arguments, non-trust activities, particularly custody and safekeeping, have been fully within the scope of National Trust Banks' authorized business since the OCC began issuing licenses. In fact, most National Trust Banks already engage in this business, including uninsured National Trust Banks that are subsidiaries or affiliates of full-service insured national or state banks. In the third quarter of this year, National Trust Banks reported managing nearly $2 trillion in non-trust custody or safekeeping assets, representing approximately 25% of their total assets under management. Therefore, if non-trust custody and safekeeping services are deemed unacceptable for pending license applications, the legitimacy of existing and well-established National Trust Banking operations that disrupt the flow of funds in existing economic activities also needs to be reassessed. While the proposed businesses of some new license applicants (particularly those in the digital or fintech sectors) may be considered new to National Trust Banks, custody and safekeeping services have been conducted electronically for decades. For example, banks, including the existing National Trust Bank, typically hold corporate tickets and client custody electronically. Therefore, there is no reason to treat digital assets differently. Furthermore, we should not confine banks (including the existing National Trust Bank) to past technologies or business models. This would be tantamount to decline. The business activities of National Trust Bank have changed, as have those of other banks across the country. State trust companies are also now involved in digital asset-related activities. For example, several states, including New York and South Dakota, have authorized their trust companies to offer digital asset-related services, including custody services, to clients. Some existing banks and/or credit associations have also expressed concerns about potential unfairness or the OCC's lack of regulatory capacity to oversee new activities proposed by existing applicants. These concerns could hinder innovative initiatives that could better serve bank clients and support local economies. As I mentioned earlier, the OCC has regulated the activities of National Trust Bank for decades, ensuring that both trusteeship and non-trusteeship activities (involving the management of millions of dollars in assets) are conducted in a safe, sound manner and in accordance with applicable laws. The OCC has years of experience regulating a cryptocurrency-native bank—National Trust Bank—and receives feedback from existing national banks almost daily regarding their innovative products and services. All of this strengthens my confidence in the institution's ability to effectively regulate new entrants and new business ventures by existing banks in a fair and impartial manner. We welcome initiatives from existing banking institutions and will ensure that both new and established institutions are treated fairly and adhere to the same high standards, given similar business activities and risks. One of the greatest strengths of the federal banking system is its ability to evolve from the telegraph era to the blockchain era and to actively embrace new technologies to provide banking products and services to customers from rural to urban centers. Despite Congress reforming national banks more than 160 years ago, they remain a vital part of the U.S. financial system. This is no accident. Rather, it is a direct result of Congress and the courts' long-standing recognition that banks can and must adapt and develop new ways to conduct their long-established businesses. Preventing national banks (including National Trust Bank) from engaging in reasonably permissible activities simply because their activities are considered new or different from those of large technology markets undermines this fundamental premise. This could lead to economic stagnation and potentially have profound consequences for the banking system. Appendix 2: What other no-action letters has the SEC issued recently? A no-action letter is a document originating from the US legal system. It is a formal written document issued by a regulatory agency upon application by an entity or individual it regulates, indicating that if the entity or individual carries out the action as described in the application, the regulatory agency will not take legal or enforcement action. Its core function is to eliminate regulatory uncertainty; it is not a legally binding document. On September 29, 2025, the SEC issued a no-action letter stating that, based on the facts described, the SEC would not recommend enforcement action regarding a certain token issued by DoubleZero. This move was seen as an important signal of changes in cryptocurrency market regulation, representing a greater willingness by the authorities to make rulings based on specific circumstances on certain issues concerning the classification of tokens and securities. On September 30, 2025, the SEC's Division of Investment Management issued a "No Action Letter" to Simpson Thacher, confirming that under certain conditions, state-chartered trust companies can be considered Rule 206(4)-2 (qualified custodians under the Counsel Act) and custodians permitted under the Act of 1940, and the SEC will not take enforcement action against corporations and registered funds on this arrangement. This move helps traditional asset management firms gain a clearer regulatory position regarding crypto asset custody and compliance services.